Govt notifies phased import duty hike on EV parts, lithium-ion cells

The government has notified phased increase in basic customs
duty on parts of electric passenger vehicles to be assembled in India to 15 per
cent from April 2020 and 10 per cent on imported lithium-ion cells by April
2021 to promote domestic manufacturing of EVs. The notification is part of the
road map under the phased manufacturing programme (PMP), and also entails
doubling the basic customs duty on completely built units of electric buses and
trucks to 50 per cent from April 2020.

Currently, the basic import duty on completely knock-down
kits used in electric buses, passenger EVs, electric two-wheelers,
three-wheelers and electric trucks is 10 per cent, which will be raised to 15
per cent from April 2020.

Basic customs duty on parts used in manufacturing electric
vehicles (EVs) like AC or DC charger, motor and motor controller; power control
unit, among others, will also be increased to 15 per cent from nil at present
starting from April 2021, as the Centre eyes to promote mass adoption of EVs
through schemes like FAME II to be rolled out from April.

The basic import duty on battery packs used in manufacturing
electric vehicles will also be increased to 15 per cent from the current 5 per
cent from April 2021. The basic import duty on lithium ion cells used in
manufacturing of lithium ion accumulator for EVs will be doubled to 10 per cent
from April 2021.

The phased manufacturing programme is part of a road map
wherein through graded duty structure indigenous manufacturing of electric
vehicles, its assemblies and parts or inputs of the sub-assemblies shall be
promoted over a period of time.

The intention is to substantially increase value addition
and capacity building within the country.

“The PMP shall enable the manufacturers in the sector
to plan their investments for establishment of a robust indigenous electric
vehicles and related sub-assembly/ components manufacturing base in
India,” the heavy industries ministry said in the notification.

The Union Cabinet last week approved setting up of ‘National
Mission on Transformative Mobility and Battery Storage’ to drive clean,
connected, shared and sustainable mobility initiatives in the country.

It entails creation of a PMP valid for five years till 2024
to support setting up of a few large-scale, export-competitive integrated
batteries and cell manufacturing Giga plants in India.

The government has been pushing for popularisation of
electric and hybrid vehicles in the country and has already notified the Rs
10,000-crore FAME II scheme to be implemented from April 1 for three years.

Source: PTI

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